Australia: The Workers Compensation Commission does not function as a Court: Obligation to afford procedural fairness depends on the circumstances of the particular case

Curwoods Case Note
Last Updated: 4 November 2011
Article by Terri Hirbod-Bassi and Michael Poulos

Judgment date: 27 September 2011

McCarthy v Patrick Stevedores No 1 Pty Limited (2011) NSWCA 311

New South Wales Court of Appeal1

In Brief

  • Mr John McCarthy, the appellant worker, sustained physical injuries during the course of his employment with the respondent. There was no dispute as to the facts surrounding his injury and the worker subsequently received lump sum compensation and weekly compensation payments for periods of total incapacity.
  • The appellant worker sought weekly compensation benefits pursuant to s 40 for the period from 1 July 1998, on the basis that, as a consequence of his injuries, he had been "downgraded" in his position and suffered a loss of wages.
  • Upon appeal, the Court of Appeal found there to be no error of law and confirmed the Deputy President's decision.
  • The Court of Appeal dismissed the appeal with costs.


On 29 August 1998, whilst in the course of his employment with the respondent employer, the appellant fell onto his buttocks whilst attempting to sit on a swivel chair.

As a result of the subject work incident, the appellant suffered injuries to his lumbar spine, right leg, left leg and left hip. The facts surrounding the incident and the injuries were not contentious; in fact, the appellant received an award for weekly compensation payments for a closed period, together with an award for lump sum compensation, which settled in 2005.

In or about August 2009, the appellant sought weekly compensation payments of partial incapacity for the period commencing 1 July 1999, pursuant to s 40 of the Workers Compensation Act 1987 (the 1987 Act).

The appellant alleged that prior to the injury he was employed by the respondent as a grade 5 Allocations Officer. His role involved performing clerical duties and duties which required walking and stair climbing.

The appellant claimed that as a consequence of his involvement in an industrial action, he had been "downgraded" to the position of a grade 4 Receiving and Delivery Clerk. Although, the claim for partial incapacity was made from 1 July 1999, evidence provided by the appellant suggested that the average weekly earnings of an Allocations Officer did not exceed those of a Receiving and Delivery Clerk until 1 July 2004.

The respondent's insurer disputed liability in respect of the claim for partial incapacity on the basis that the appellant had not suffered any loss of wages or reduction in earning capacity since 1 July 1999 as a result of his injury, other than during periods for which he had received compensation.

The evidence provided by the appellant created some confusion as to whether or not, at the relevant time, the appellant was employed as an Allocations Officer or a Receiving and Delivery Clerk. Essentially, the appellant submitted that the written evidence of 6 of the 8 lay witnesses, recalling that the appellant working as an Allocations Officer at the time of his injury in August 1998, should be accepted as correct. The respondent submitted that the appellant's own 2004 Statement, which indicated that he commenced employment as a Receiving and Delivery Clerk in June 1998, should be preferred.

The appellant commenced proceedings in the New South Wales Workers Compensation Commission (Commission). At first instance, the Arbitrator concluded that the worker had "failed to establish the threshold proof of his pre-injury duties, his duties post injury, and the issues going to proof of economic loss". Ultimately, the Arbitrator ordered an award for the respondent.

The appellant worker appealed the decision of the Arbitrator to the Deputy President "on the papers". On appeal, the Deputy President upheld the primary decision of the Arbitrator.

The appellant appealed to the Court of Appeal.

Appeal to New South Wales Court of Appeal

The Court of Appeal dismissed the appeal.

In his leading judgment (with Basten JA and Handley AJA in agreement), Meagher JA considered that the Deputy President had not misapplied s 40 and had correctly concluded that the appellant had failed to establish that he had suffered any economic loss as a result of the injury for the following reasons:

  1. The appellant had not conclusively established that there was a change in his position as a result of the injury. In reaching this conclusion, the Deputy President had relied principally upon the appellant's 2004 Statement which revealed that, at the time of his injury, the appellant carried out the duties of a Receiving and Delivery Clerk, and this did not change as a result of the injury.
  2. The appellant had not conclusively established that any change in duties from Allocations Officer to a Receiving Clerk was due to the effects of the injury.

The appellant submitted that the Deputy President had failed to afford him procedural fairness by proceeding to determine the appeal without giving the appellant the opportunity to cross-examine, and challenge, the evidence of the lay witnesses.

In support of these submissions, the appellant relied upon the recent case of Hancock v East Coast Timber Products Pty Limited2. In Hancock, the New South Wales Court of Appeal allowed an appeal from the President of the Commission, who rejected evidence of the worker's treating specialist on the basis that there was no proper factual foundation for the expert's opinion and there was no satisfactory explanation for the expert's conclusion.

Both Meagher JA and Basten JA distinguished the circumstances of the current case from Hancock. According to Basten JA there is no obligation to accord procedural fairness to a witness, nor will a judgment be set aside on the basis of a failure to take such a step.

At paragraphs 8-9, Basten JA stated:

"The impropriety in issue in Hancock was that of a party in making submissions attacking the integrity of a witness in circumstances where it had not sought to cross-examine.

So understood, Hancock provides no assistance in the present case. Nor is it necessary to have regard to other comments in Hancock as to the proper manner in which proceedings should be conducted before the Commission. Absent reviewable error, those matters are entirely for the parties to address and the Commission to determine."


The Court of Appeal confirmed that the case of Hancock cannot be cited arbitrarily in instances where a perception of denial of procedural fairness exists. The Court of Appeal held that the facts of Hancock differed substantially to the circumstances of the current case.

Essentially, it is imperative for insurers to bear in mind that the Commission is not a court and is not required to function as a court.


1 Basten and Meagher JJA and Handley AJA

2 (2011) NSWCA 11

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